Investment Q&A

Q: With the goal of taking a basket approach to the pharma sector, is there a large cap, Canadian listed, US Pharma names ETF that you favour?

Thanks.

John

Q: Hope everyone at 5i is doing well in these times!

I have been sitting on mostly cash in my RRSP/LIRA and would like your recommendations on the best ETFs to consider for my full US and International exposure. All of these would need to be listed on the TSX as I am purchasing in CAD $. While I know you prefer non-hedged, I’d greatly appreciate if you could explain benefits/workings of hedged vs. non-hedged considering the current environment. And provide ETF recommendations for each.

I am looking to achieve a balance of diversification, reasonable MER, minimizing any withholding tax while optimizing the potential in market recovery. For US, I would like to have a technology ETF, health care ETF and a broader spectrum ETF – but also open to ideas. Also, looking for recommendations on International – one broad ETF or perhaps that and a mix of ETFs. I recognize there can be overlap (e.g. between a tech and broad sector fund), so if you can give me a sense of the degree of duplication that may be present in your recommendations. Perhaps going heavier on tech right now could be a good thing.

While I started off thinking ETF selections would be relatively simple, in reading various Q&A there seem to be many important considerations - your assistance is appreciated. Again, all of these are being purchased in RRSP/LIRA accounts with the goal of optimizing my returns over a 10 year window.

Q: What do you think of hhl for income and some growth ? Or can you recommend a better health care etf in Canada ?

Q: HLL ETF. I cannot find any details on what is in this ETF. Hope you can help me with some information

Q: Do you have an opinion on this ETF for a RRSP?

Q: Hi Everyone at 5i! You have mentioned that HHL is not your favorite ETF in the health care sector. What would you consider to be a more favourable alternative that exhibits better growth and some income as well ? Cheers, Tamara

Q: Your opinion on a 3% holding in HHL for income would be appreciated.

Q: I would like your comments on this ETF. Is it a good investment for a retired investor.
Thank you

Q: Could I get your thoughts on how HHL might behave in a recession. I understand Healthcare as a sector would be a Defensive sector however I also understand 5i is not to crazy about the cover call aspect, believing it would not protect again the down side. So how would HHL behave? Would the price fall greater than the average defensive share price, or would investors still consider it a defensive play and hold steady the price. Or would the cover call aspect cease to work and the dividends reduce? If it's more an impact on the dividends, is there a way of telling how much the
cover calling is adding to the dividends and therefore what dividends could be expected in times of a recession. Thanks

Q: Could I please have your comments on HHL.
Is it a buy for income and capital preservation for a retired investor?
Thank you

Q: Health care sector: I own GUD, COV and RHT (I did not get out of RHT in time so will hold) in Canadian health sector - all are down significantly. I follow BE portfolio and have diversified non- Canadian mutual funds and etfs. What are your thoughts on USA health sector, which if any of the IBB, HHL, ZUH would you add for long term (5+ yrs)?

Q: As a retired person I am always looking for high yield investments.
So I look at something like HHL from Harvest. It holds 20 equal weighted mainly US healthcare stocks. A solid sector with good long term demographics. I see their current yield on what they are paying out is 8.67% - all capital gains - great! But I see the average dividend yield on the stocks held is only 1.96%. How can that be? Seems it’s done using covered calls Not sure how that works but sounds like it creates added risk. What if the covered call $ generated isn’t enough to meet their intended distribution? Where does the extra $ go if covered call exceeds the distribution.

So I investigate the industry a little more and I see words like- total return swap based, inverse, currency hedged, low/ high volatility, fund of funds, proprietary methodology, 2x returns etc., and I start to wonder what’s going on?

Then I remember the term “ flow through shares” of some time ago and say to myself “ it’s déjà vu all over again.

Derek

Q: This seems to be a good way to play the US health care sector and receive a substantial dividend (8%+). Is this an ETF you would recommend in an RRSP?

Q: Can you please comment on the harvest funds and their unusual high distribution. On a general note, I have about 7 years till retirement, is a covered call strategy beneficial?

Thanks,
Dave

Q: I originally purchased this holding in a registered account when it was an income trust. It converted to an ETF a while back. Since acquiring it this has been a steady dividend payer and I do rely on its income. My cost is greater than its value today. What is your opinion of this stock going forward? Should sell my small position and look to another area>

Q: I understand that HHL distribution is ROC, Is that Capital Gains or return of my money? Is there easy way to check for any distribution?
Thank you
Compliments of the Season.
Cec

Q: Morning 5iResearch Team,

I am thinking of taking a position on HHL but a little leery about the high dividend yield. Your thoughts on this ETF is much appreciate.

Q: What would be your recommended ETF's for the following sectors that would provide safety and a regular monthly income . Financial, Consumer, Utilities ,, Energy, and Healthcare. I have noticed that you generally prefer for retired conservative investors like me to follow more the income portfolio.
Your comments and recommendations are appreciated. Thanks.

Q: Kudos to your new website, it’s very user friendly and a good tool for the small DIY investor!
My inquiry is on a Canadian Healthcare ETF (HHL) which I find interesting in that it includes US companies such as Novartis, Stryker, Medtronic, Johnson & Johnson and Anthem in the top 10 holdings, indicated dividend is north of 8.00%!
Also, if one is to hold it in a TFSA would the dividends be subject to the 15% foreign withholding tax?
Thnx for your great service!!

Q: I presently have no healthcare or tech holdings in either my RRSP, TFSA or cash. Am retired,like dividends, but can take some risk.

Looking at having 10% in each sector with HHL (50%),CSH.UN (25%),GUD(25%)in healthcare and TXF(50%),ABT(25%)PHO(25%) in tech.

What do you think of this approach and the individual holdings?

Where would you put each one ( RRSP,TFSA cash)?

Thanks Derek